Less than a year ago, I was in a major discount retailer making a nice-sized purchase. The cashier was pretty friendly as we discussed the holidays as well as the coming year. Next thing I knew, she asked me if a wanted to apply for a credit card. We’d begun such as nice rapport – though I knew she’d get a bonus or other perk just by me applying, regardless of whether or not I was accepted. I just didn’t want to say no. Then somehow my state ID flew out of my wallet and into her hand to swipe across a terminal to find out my eligibility. Within 2 minutes, I was approved for a small line of credit, with a steep interest rate.
As I get close to paying off balances on a few credit cards, I get more offers in the mail. Tempting offers, I tell you, some in the five figure range. However, what any free or low-cost financial literacy class will teach you is to read the fine print first, even before acting on any pre-approval notice that urges you to contact them within a limited period of time. Don’t call or inquire until you get “it “in writing.
“It”, also known as insane interest rates, fees (sometimes hidden with legal jargon) and other charges guarded by a disclaimer. Now, my typical scenario is to get one of these wonderful offers in the mail when I need work done on my car, see an investment opportunity I can’t jump on just yet or just want to go shopping. These companies know that this is the time of year that people spend the most money and they want a cut.
However, there are still many who could care about a $50 turning into $64.50. They need time and time is money and to heck with a 29% interest rate, they’ll worry about it later because the recession is still real for some. More commonly viewed as survival and not surrender.